202 F.3d 573 (2nd Cir. 2000), 99-6080, Name.Space, Inc. v Network Solutions

Docket Nº:Docket No. 99-6080
Citation:202 F.3d 573
Party Name:NAME.SPACE, INC., Plaintiff-Appellant, v. NETWORK SOLUTIONS, INC. and National Science Foundation, Defendants-Appellees.
Case Date:January 21, 2000
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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202 F.3d 573 (2nd Cir. 2000)

NAME.SPACE, INC., Plaintiff-Appellant,


NETWORK SOLUTIONS, INC. and National Science Foundation, Defendants-Appellees.

Docket No. 99-6080

United States Court of Appeals, Second Circuit

January 21, 2000

Argued: Nov. 4, 1999

Appeal from an order of the United States District Court for the Southern District of New York (Robert P. Patterson, Jr., Judge), entered March 16, 1999, denying plaintiff's motion for summary judgment and granting defendants' cross-motions for summary judgment.

Judgment affirmed.

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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GLENN B. MANISHIN, Blumenfeld & Cohen, Washington, D.C. (Stephanie A. Joyce, of counsel), for Plaintiff-Appellant Name.Space, Inc..

WILLIAM M. DALLAS, JR., Sullivan & Cromwell, New York, N.Y. (Philip L. Sbarbaro, Hanson and Malloy, Washington, D.C., of counsel), for Defendant-Appellee Network Solutions, Inc.

MARLA ALHADEFF, Assistant United States Attorney, New York, N.Y. (Mary Jo White, United States Attorney for the Southern District of New York, Gideon A. Schor, Assistant United States Attorney, New York, N.Y., of counsel), for Defendant-Appellee National Science Foundation.

Before: MCLAUGHLIN, JACOBS and KATZMANN, Circuit Judges.

KATZMANN, Circuit Judge:

Plaintiff Name.Space, Inc. ("Name.Space") appeals from a judgment of the United States District Court for the Southern District of New York (Robert P. Patterson, Jr., Judge), granting summary judgment for defendants Network Solutions, Inc. ("NSI") and the National Science Foundation ("NSF"). Name.Space alleged antitrust and First Amendment violations against NSI, then the sole provider of Internet domain name registration services, and NSF respectively. The district court held that the activities of NSI were immune from antitrust liability, and that Internet domain names did not constitute protected speech under the First Amendment. See pgMedia, Inc. v. Network Solutions, Inc., 51 F.Supp.2d 389 (S.D.N.Y. 1999). On appeal, Name.Space contends that NSI's activities are not entitled to implied antitrust immunity, and that NSF violated the First Amendment. We disagree and therefore affirm the judgment below.


I. The Internet Domain Name System

The dispute between the parties centers on the Domain Name System ("DNS") of the Internet.1 The DNS controls the way in which each component of the Internet identifies and communicates with one another. The various protocols that allow such communications to take place are known as Internet protocols ("IP"), and each entity connected to the Internet is assigned one or more unique numeric addresses, known as IP numbers or IP addresses. An IP address is a string of four sets of numbers, separated by periods, such as "," and every host or computer on the Internet is assigned such a numerical IP address. See Management of Internet Names and Addresses, 63 Fed. Reg. 31,741, 31,741 (1998). In the early stages of the Internet's development, IP addresses were assigned and maintained by the late Dr. Jon Postel, whose work was eventually conducted under the auspices of a private entity known as the Internet Assigned Numbers Authority ("IANA"). See id. Due at least in part to the difficulty of remembering numeric IP addresses, Dr. Postel and his colleagues also administered the assignment of alphanumeric names to each host computer on the Internet. See Developments in the Law - The Law of Cyberspace, The Domain Name System: A Case Study of the Significance of Norms of Internet Governance, 112 HARV. L. REV. 1657, 1660 (1999). A file containing the mappings of these host names to the corresponding IP addresses was updated and maintained on each host computer. See 63 Fed. Reg. at 31,742.

However, as the Internet continued to grow in size and complexity, this horizontal system became increasingly unwieldy. By

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the mid-1980s, the time and resources necessary to update the files on each host computer, and the desire for greater local structure and control over host names, inter alia, suggested that a different system was necessary. Therefore, the Internet community developed a new DNS for mapping host names onto IP addresses. The current DNS has a hierarchical tree structure of names. A domain name, such as www.uscourts.gov, comprises a series of alphanumeric fields, or "domains," separated by periods or "dots." The alphanumeric field to the far right of a domain name is the Top Level Domain ("TLD"), and each prior field to the left of the period preceding the TLD is the Second Level Domain ("SLD"), the Third Level Domain, and so on. Thus, TLDs are the highest subdivisions of Internet domain names, and SLDs and other lower level domain names identify the host computers and individual websites under each TLD. There are currently two different types of TLDs: seven generic TLDs ("gTLDs"), namely, ".com," ".net," ".org," ".edu," ".gov," ".int," and ".mil,"2 and approximately 240 two-letter country code TLDs ("ccTLDs"), such as ".us," ".uk," ".jp," and ".kr." 3.

The process of converting domain names into IP numbers begins with the "root zone file," which is the highest level of the domain name system and contains the databases enabling an Internet address query to be routed to its proper destination. See Improvement of Technical Management of Internet Names and Addresses, 63 Fed. Reg. 8,826, 8,826 (1998). The master root zone server of the DNS contains the authoritative root zone file, from which the other 12 duplicate root zone servers download new domain name information on a daily basis. See 63 Fed. Reg. at 31,742. The root zone file serves the function of directing an address query to the proper TLD zone file, which contains information regarding the location of the numerous gTLDs and ccTLDs. The TLD zone file in turn directs the address query to SLD zone files, which contain listings of all SLDs and corresponding IP numbers under the TLD in question. The SLD zone files then direct the query to lower level portions of the DNS, until the address query is fully resolved.

The parties contest NSI's control of the master root zone server and file. NSI currently maintains the master root zone server, and was the sole registrar for new domain names under the .com, .org, .net, .edu and .gov gTLDs when this action was first commenced in the district court. NSI has performed these functions since 1993, pursuant to Cooperative Agreement No. NCR-9218742 (the "Cooperative Agreement"), awarded by NSF through a competitive process pursuant to the National Science Foundation Act, 42 U.S.C. § 1861 et seq., and the Federal Grant and Cooperative Agreement Act, 31 U.S.C. §6301 et seq. Article3 of the Cooperative Agreement states that NSI shall provide domain name registration services in accordance with RFC 1174.4 RFC 1591, which superceded RFC

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1174 in March 1994, states that applications for new TLDs are handled by NSI "with consultation with the IANA." No new gTLDs have been added to the Internet since NSI commenced its provision of domain name registration services, although numerous ccTLDs have been.

I. Competition in Domain Name Registration and the Privatization of the DNS

In recent years, there has been an increasingly contentious debate, both within the U.S. and internationally, over the addition of new gTLDs to the Internet. See 63 Fed Reg. at 31,743. In late 1996, Name.Space's predecessor-in-interest, pgMedia, Inc.,5 began providing domain name registration services in competition with NSI, and accepted new registrations under approximately 530 new gTLDs, such as ".forpresident," ".formayor," and ".microsoft.free.zone." However, domain names registered under Name.Space's gTLDs are not universally resolvable, that is, they cannot be converted into the correct IP numbers by most users of the Internet, because those gTLDs are not listed in the root zone files. Thus, unless NSI amends the master root zone file to include Name.Space's new gTLDs, the domain names registered with Name.Space cannot be located by all Internet users, as Internet address queries are initially routed to the various root zone servers containing NSI's master root zone file.

On July 1, 1997, in response to growing domestic and international concerns regarding the future of the DNS, President Clinton directed the Secretary of Commerce to privatize the DNS. See 63 Fed. Reg. at 8,827. On February 20, 1998, after a consultative process whereby the Department of Commerce solicited public comments on various issues regarding the DNS, including whether new gTLDs should be added, the National Telecommunications and Information Administration-a part of the Commerce Department- published a proposed rule and request for public comment, the so-called "Green Paper." See id. That document recommended that the DNS be managed by a private, non-profit corporation which would determine, inter alia, the circumstances under which gTLDs should be added to the root server system. See id. at 8,826-28. The Green Paper contemplated that up to five new gTLDs be added during the period of transition to private management of the DNS, in order to enhance competition and enable other entities to enter the Internet registry business. See id. at 8,829, 8,831.

After considering the numerous public comments that were received in response to the Green Paper, the Commerce Department published a final policy statement known as the "White Paper" on June 10, 1998. See 63 Fed. Reg. at 31,741. The White Paper affirmed the basic proposals of the Green Paper with some modifications, including a determination that no new gTLDs would be added to the Internet during the transition period, as such decisions would be best made by the new, globally...

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